UK manufacturing activity stabilised in January with the Purchasing Managers’ Index (PMI) recording a reading of 50.0 compared with 47.5 in December and eight consecutive months of contraction, according to the survey published by IHS Markit on Feb 3.
A reading of 50 denotes the level which separates contraction from expansion, indicating that while most survey respondents cited an improvement in operating conditions some extenuating circumstances were still of concern.
The new orders and employment subcomponents of the headline index showed marked improvements in January, with the former climbing to 51.23 from 46.45 the prior month, as domestic industry shook off the shackles of economic uncertainty around Brexit.
Unsurprisingly, the export orders subcomponent continued to weigh on the UK manufacturing sector with a reading of 47.7 in January, as survey respondents noted that subdued economic activity in major European markets was a significant contributing factor.
IHS cautioned that optimism remained low compared to historical standards, in part due to the ongoing uncertainty around the full impact of Brexit on local businesses and the wider economy.
More pertinently, improved manufacturing activity, should it sustain in the coming months, will be welcome news for domestic scrap processors who are struggling to source sufficient volumes for mill purchases.